Wednesday, February 15, 2012

Fresh, Direct and Subsidized

I never understood why, when large, profitable companies threaten to move out of New York, they immediately get offered millions in subsidies.

Consider FreshDirect, the online grocery store and food delivery service. The firm floats the idea of a $100 million subsidy offer from New Jersey and gets almost 30 percent more from Mayor Bloomberg--$127.8 million, including $20 million in cash.

The careful language of this New York Times article makes the deal suspect: "The company now plans to build a $112 million complex in the Bronx and over the next 10 years add almost 1,000 jobs to its work force of 1,963," the paper writes, but all Seth Lipsky, the head of Bloomberg's Economic Development Corporation, would confirm is that FreshDirect will invest "tens of millions of dollars" in a new facility. This divergence implies that the highly-touted $112 million investment might not ever happen--and that those 1,000 new jobs might never materialize. Furthermore, does anyone at City Hall think FreshDirect ever thought seriously about the logistics of doing just-in-time deliveries to its overwhelmingly NYC-based customers by running trucks over the always-crowded George Washington Bridge and through the routinely tied-up Lincoln and Holland Tunnels?

This deal reminds me of the 80s, when NBC extorted more than a hundred million from the city for its supposed decision to stay in 30 Rock instead of jumping across the Hudson. Think about the possibilities: Brian Williams broadcasting nightly from NBC's world news headquarters in Secaucus and Tina Fey starring in a sitcom called 1782 Paterson Plank Road.

1 comment:

Online grocery shopping has a pretty lengthy history as far as web businesses go. In the late 1990s business such as Webvan, Peapod and Homegrocer. Peapod was one of the few to survive the late 90s dot com bust and is currently thriving. Other than Peapod, growing online grocery stores can be found at FreshDirect, AmazonFresh and YourGrocer. Logic would dictate that, based on the projected increased sales in this space, the list of online food retailers is set to explode in the coming years.wholesale indian spices

About Me

I spent most of the past four years hanging out with street hawkers, smugglers, and sub-rosa import/export firms to write Stealth of Nations, a book that chronicles the global growth of System D--the parallel economic arena that today accounts for half the jobs on the planet.
Prior to that, I lived in squatter communities across four continents to write Shadow Cities, a book that attempts to humanize these vibrant, energetic, and horribly misunderstood communities.
My articles on cities, politics, and economic issues have appeared in many publications, including Harper's, Scientific American, Forbes, Fortune, The Nation, The New York Times, The Washington Post, Metropolis, and City Limits. Before becoming a reporter, I worked as a community organizer and studied philosophy. I live in New York City and do most of my writing on manual typewriters.